Two Major Chinese Cities to Impose New Property Curbs to Deter Speculators

China's northeastern port of Qingdao has joined more than two dozen major cities in rolling out property curbs as speculators from outside flood the market, while Nanjing in the east intensified policy curbs to tame the market, according to a media report and government announcement on Wednesday (15/03). (Reuters Photo/Jason Lee)

Beijing. China's northeastern port of Qingdao has joined more than two dozen major cities in rolling out property curbs as speculators from outside flood the market, while Nanjing in the east intensified policy curbs to tame the market, according to a media report and government announcement on Wednesday (15/03).

Qingdao non-residents were now limited to buying at most one property in the city, in the eastern province of Shandong, on the condition that they had paid at least one year of local taxes or insurance continuously, it said.

Policymakers also hiked the downpayment ratio for first and second home purchases by 10 percent, to 30 and 40 percent respectively, according to Qingdao News, which cited a notice jointly issued by five government bodies including the central bank's Qingdao branch.

Banks would stop issuing mortgages for third home purchases, it said.

The rules, effective from March 16, also tightened lending conditions for home buyers borrowing from the country's housing fund, which offers a lower interest rate on mortgages than banks.

The newspaper said it was "reasonable and very necessary" to "mildly guide market expectations" as more non-residents have come to the city to invest in real estate due to existing curbs in overheated cities, bringing higher risks to the local market.

Nanjing, capital of China's eastern Jiangsu province and the second runner-up in the price rally last year, suspended sales for residents who already own two houses in the city's core area, according to a notice on the city government's website.

Non-residents are required to have paid at least two years of taxes and insurance to be qualified to buy their first homes.

Official data from the statistics bureau shows average new home prices in Qingdao and Nanjing rose 13.1 percent and 38.8 percent in 2016 from a year earlier.